The Trump administration doesn’t want marijuana businesses dealing in all cash — as they often do. But officials don’t really want them using banks, either.
“I assure you we don’t want bags of cash,” Treasury Secretary Steve Mnuchin told the House Financial Services Committee on Tuesday after facing questions from representatives concerned that the cash-heavy environment of the weed business could attract violent crime. “We want to make sure we can collect our necessary taxes and other things in something other than cash.”
Mnuchin also confirmed that the Department of the Treasury was reviewing 2014 federal guidance that gave banks a process to serve marijuana businesses in states where they’re legal. Attorney General Jeff Sessions threw that into question when he reversed course in early January on an Obama-era policy that shielded people and businesses involved in legal weed from certain types of federal prosecution. Sessions didn’t give the Treasury department handling weed a head’s up on the change, but Mnuchin said he’s consulting with the Department of Justice now.
In his notice, Sessions made sure to mention the laws that prevented any banking associated with illegal activities — like selling weed, at least in the federal government’s eyes. Marijuana business already avoid banks for those reasons, although about 400 banks and credit unions deal in the weed industry anyway.
Mnuchin, however, assured the House panel that he wasn’t planning to rescind the banking guidance — issued by the Financial Crimes Enforcement Network (FinCEN) — without a replacement that addresses the problems of dealing in all cash.
Still, members of the committee were unsure how marijuana businesses could move past cash unless Mnuchin kept their access to banks on the table.
“I can conceive of no way in which you can avoid bags of cash if we back down from FinCEN guidance,” Democrat Rep. Denny Heck of Washington asked. “Do you have something in mind that would enable us to prevent that very perilous circumstance to public safety of having bags of cash?”
The back-and-forth in Washington came just days after the Kansas City Federal Reserve Bank gave a Colorado credit union conditional approval to work with businesses that serve the marijuana industry, like accountants and landlords.
As the feds continue to wrangle over this question, some states have already moved forward with their own solutions. California announced last Tuesday that officials would study creating a publicly funded weed bank that operates outside of federal law.
Cover image: An owner of a medical marijuana dispensary in Los Angeles prepares his monthly tax payment in this June 27, 2017, file photo. (AP Photo/Jae C. Hong,File)